Most operational supply chain issues fall into a few clear categories that, when approached in an orderly way, do not require drastic measures to solve. Our Supply Chain Issues series explores each of these categories and provides hands-on solutions for key decision-makers. To read the entire series please click here.
Spreadsheets have long served as the standard management tool for supply chains. However, the unforgiving traits of these multi-authored files revealed critical version control and inaccuracy issues, which further exposed vulnerabilities in the mass supply chain. As both regional and global operations strive to acclimatize to an evolving world trade market, it is clear that spreadsheets are prime for retirement.
Spreadsheet limitations exposed by the pandemic
The COVID-19 pandemic drove supply chains into turmoil with a categorical shift in consumer demand patterns that congested ports, inflated spot rates and has led to closer FMC scrutiny. With logistics and operations teams overstretched, customer service teams were substantially unprepared for a situation that did not reflect service levels forecasted for the year’s operations.
Furthermore, amidst a congested shipping season, managers could not rectify errors with basic visibility and supply chains were upended in part by severe spreadsheet oversights. As a result, key decision makers could not manage the chaos of the pandemic and the industry collectively recognized the need to evolve into a digital era that manages logistics at a rapid rate of change. Based on this perfect storm of variables, the pandemic will serve as a catalyst to propel supply chains into a vastly different competitive landscape for the digital era.
Key issues of spreadsheet management
Management distractions and lost resources
Spreadsheets demonstrate their value as static snapshots of your company’s usage patterns and forecasted trends. However, they are a labor-intensive management system that reduces workplace efficiency as employees manage their time between assessing data and reacting to actualized operational issues in real-time.
In a 2018 study, Freightos research cited that nearly 50% of US businesses use spreadsheets to manage their international supply chain. Within that set, over 60% of mid-size importers waste 20-500 hours per year from managing shipments manually, a figure that approximates to 2-5 hours of administrative labor allocated per individual shipment. This daily scenario pulls focus from a manager’s revenue generating activities and further delays response times to critical shipment delays. Here, a manager is restricted from sourcing for opportunities to create solutions and negatively impacts the bottom line.
Unintended assumption of risk
Spreadsheets are designed to be managed by a primary author who maintains full access and capabilities. In this, information is siloed amongst team members, which hinders collaborative corporate cultures and progressive team dynamics. Additional bookkeeping creates paper trails for purchase orders and supplier agreements, which further increases chances of human error or misplacing your data entirely.
To this end, it is near impossible for a manager to ensure accuracy as users replicate master files and copy to their own devices, wherein the original asset no longer serves as a single source of truth. At this stage of a company’s evolution, there is an assumption of risk in continuing workflow processes through such manual tools.
Limits capacity to scale
Mapping various channels in your supply chain over an intricate network of worksheets becomes increasingly difficult when applying them to a network of internal teams. Compounding the work environment further, a broader network of transportation, material goods and service providers across geographies must be accounted for in a company’s manual tracking tools. When taking into account the dynamic movement attributed to each component, a spreadsheet simply fails to serve the best interests of the supply chain’s potential for growth.
Operating within a tool that invites an increasing margin for error leads to pipeline inefficiencies and delays the opportunity for process improvement. In this, the capacity at which a company can grow at scale is limited to the functional performance of its best management tools.
From a recent survey produced in partnership with the Council of Supply Chain Management Professionals (CSCMP), 78% of companies currently use spreadsheets to manage their supply chain. However, the need to replace outdated IT systems and to remove existing silos was identified as the overall critical next step for the industry’s key players.
Upgrade your visibility: move spreadsheets to a digital cloud-based platform
Retiring your spreadsheets and graduating to the next step in digital innovation provides live insights into the supply chain, including visibility of critical stockouts and shipment delays that occur at ports, warehouses and loading zones. Begin this process by:
Document your end-to-end process
Map your network of partners and suppliers
Establish a data model and database
Set up connections
Establish the dashboards
Now is the time to take the first step to succeed in building a future-proof supply chain.
Supply chain leaders from the CSCMP agreethat prioritizing customer service is imperative. In their view, the most important measure by which to achieve this is to implement tools for real-time visibility of orders, shipments and inventory to serve as the critical key to a corporation’s longevity.
Given the breadth of moving parts, transition to a cloud-based platform will see you through this next evolution of a digitally competitive supply chain and achieve differentiating customer service.